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earnings yield

   Also found in: Wikipedia 0.04 sec.
Earnings Yield
The earnings per share for the most recent 12 months divided by market price per share.

Notes:
Earnings yield is the inverse of the price-earnings ratio. Basically, it's the amount of earnings you buy for every dollar worth of stock.


Earnings yield
The ratio of earnings per share, after allowing for tax and interest payments on fixed interest debt, to the current share price. The inverse of the price-earnings ratio. It is the total twelve months earnings divided by number of outstanding shares, divided by the recent price, multiplied by 100. The end result is shown in percentage terms. We often look at earnings yield because this avoids the problem of zero earnings in the denominator of the price-earning ratio.

earnings yield

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In turn, Ryanair would benefit from Aer Lingus's superior earnings yield, which is better than the returns Ryanair can get on its cash deposits.
The figure below compares the S&P 500 earnings yield with the ten-year Treasury bond yield, It shows that, beginning in September 2002--and for the first time since Ronald Reagan's first election--investors required from equities a higher earnings yield than the benchmark bond yield.
The proxy we use to estimate its future real return is the current earnings yield (e/p) for the S&P 500, based on the notion that earnings derive from real assets and so should provide a real return above inflation.
 
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